Hello again - Back to the grindstone for Williams' sunburnt nose then, after a superb week's high level skiing in the Alps - an overnight dump of 40cm of fresh snow was followed by wall to wall sunshine all week. It's a tough life but somebody has to do it. The old bones are creaking a little this morning though!

So what's new in the markets? Not a whole lot really, as the bulls continue their run and the bears remain in snug hibernation, secure in the knowledge that their day is fast approaching. Nearer home, nobody seems to have noticed the spelling error in the text below the JJB chart in the last issue of WICS - that was a missed opportunity for you to have pulled me up!

Having been out of contact with the so - called 'real world' for over a week, I have few snippets to comment upon this weekend - I see your beloved PM is still clinging on to office by his fingernails despite the fact that he serves you not a jot. (Yes - before you pick me up on the semantics - I do realise he's not the PM of everyone reading WICS, myself included, thank goodness.) And it now seems official that climate change has in fact been greatly exacerbated by human action - now there's a real surprise.

Anyway, moving on to trading, today I want to explore 'psychology' again - very superficially, but in response to one or two of your recent emails. 'Very superficially' simply because as I've suggested in the past, I don't feel that qualified to go into great detail concerning 'thinking processes' and I can only really comment from personal experience.

The particular aspect I'm looking at today is 'FEAR'. You'll have read a little about it of course in the manual - and that might be worth a revisit. Fear is a major enemy of traders, although of course to a certain extent it's actually a good thing, in that it tempers potential recklessness - so there's a bit of a fine line between 'excessive fear', and 'not enough fear'. I guess what we're aiming for is 'Goldilocks fear'!

So what am I getting at in my usual roundabout manner?

Let's look first at 'excessive fear'. That's a very easy one to discuss, because its symptoms are so obvious. If you're excessively frightened by the trading environment, you won't actually trade. It really is that simple. Oh sure, you'll have read the TTEW manual - and indeed you'll almost certainly have bought or subscribed to innumerable other trading publications. You'll have quite a lot of software installed if you're a bit of a techie. You might even have attended a few seminars - certainly you'll have spent a lot of cash in the hope and expectation that you're going to make a living as a trader. But when it really comes down to it, you analyse things to death and sit frozen at the screen when it actually looks like there's a high probability trading opportunity staring out at you. By the time you think you just might be tempted to pull the trigger, you'll start to believe you have left it a bit late, and that nice guy Williams keeps making the point that there's no such thing as a 'missed trade' anyway, so that's OK then.

What drives that kind of fear? Two things, I think. The first is fear of financial loss, and the second is fear of being wrong. The first (fear of loss) is easy enough to deal with, by 'trading light' - your stake should be as small as possible for as long as you feel that kind of worry is dominating your thinking. And as you slowly increase your capital commitment, you'll arrive at a point where once again you begin to worry about financial losses - we all do, so have no fear that you're somehow 'alone' or 'different' in this. It's at that point that you should REDUCE your commitment, and keep reducing it till you no longer feel afraid of the financial consequences of losing positions. Slowly but surely you'll once again be able to increase your stake - think of this process as being like a chart that has reached a resistance point and has retraced before having another stab at getting higher. You could just as easily chart your 'fear level' like that!

Unfortunately, fear of 'being wrong' is a much harder mental attitude to deal with. Why? In my view, it's because many people are just too competitive about everything they do, and they feel either that they have somehow 'failed' when a trade goes against them or that their 'macho' approach has been challenged. In the skiing environment, one of my children's friends, a guy of about 30, fancies himself as a real hotshot. He's extremely fit and ultra competitive, and he cannot seem to help himself trying to show me he's a very good skier. Being a lot younger than I am, he expects to get down the mountain a whole lot faster, and you should see the look on his face when he finds me standing waiting for him at the bottom. Believe me when I say that is nothing to do with MY competitive nature - frankly I couldn't care (other than for my enjoyment of winding him up) - but everything to do with HIS excessive anxiety to 'beat' me, which results in his making a whole lot of ill - judged decisions on the way down the mountain in a frantic attempt to get the better of me - and there is simply no way in the world that he would follow my line to see how I do it. But Williams has been playing in the snow for over 50 years (scary!) and can 'read' a hill rather better than the whippersnapper. Translate exactly the same scenario into the trading environment........I'm sure you get my drift.

Moving on to 'not enough fear' - that of course can manifest itself in plain recklessness and an unwillingness to adhere to any kind of 'rules' and that's a pretty sure way to lose your trading bank. But the other kind of 'not enough fear' can be turned around into calling it 'too much fear of missing out', which can be hard to deal with. In fact, that's pretty much where markets are at the moment. They are currently dominated by the feeling among far too many people that "If we don't buy in now, we'll regret it for ever." Media hype doesn't help of course, nor does the 'broker consensus' that you can read about just about anywhere. Everything encourages us to 'buy buy'. Now please don't get me wrong - 'buy buy' is fine for a TRADER if everything points to ongoing rising prices for a while yet. But for an INVESTOR (at whom most of the media aims its comments) buying at or near the peak of a very overinflated bubble pretty much equates to 'bye bye' to your comfortable retirement. Trust me - I've been around longer than the vast majority of the competitive young bonus earners who populate (infest?) the area around Liverpool St station! It's worth noting perhaps that the great Warren Buffet of Berkshire Hathaway recently remarked that hedge funds are fantastic investments...... for hedge fund managers.... Anyway, don't fall into the trap of 'fear of missing out/getting left behind' - and if you can acquire that ability, along with the ability to open new trades in the first place, you'll have achieved the 'Goldilocks' level of fear - not too much, and not too little. Now I'm by no means sure that the foregoing comments will be of any assistance to you, but hopefully they might be of some small benefit.

Moving on to today's charts, there are two to examine. The first is an update of that of JJB Sports (from 21st January) to show how despite a drop, the dma is providing dynamic support for the price, and the second is of the FTSE100, where I'll show you a 'rising wedge' formation for the first time in WICS.

And that's plenty for this weekend - time for me to go and wash the road salt off the horse and cart.

All the best till next weekend,

Ian.

PS: Hotmail emails are once again suffering numerous bouncebacks - if that applies to you, please read the 'info' pages on my website (www.trading-the-easy-way.com/webmail.htm ) and consider setting up a better service.

PPS: I know from my publishers that a number of you have very kindly subscribed to my new Forex trading course - many thanks for doing so - there are some great profits to be made in that environment for sure. Please ensure that once your standing order has been processed you have access to the members' area of the new website. (www.tradingforex-the-easy-way.com) You'll need that to be able to watch the video updates that you'll be getting on a regular basis as I share my own analysis with you. Please contact my publishers as soon as possible for your user name and password, because the service will go 'live' some time during the coming week. (Please don't ask ME to provide you with the access details because I don't have time to deal with that aspect myself - I'll let the publishers do as much of the admin as possible so that I can concentrate on what hopefully is going to show you the way to make serious money by trading Forex!)

'IMPORTANT NOTICE: These WICS charts are for EDUCATIONAL PURPOSES ONLY. They represent only MY understanding of what is happening in the market for any particular share, stock, commodity or index. In NO circumstances should they be construed as recommendations to trade. If I choose to trade what I see, that is MY decision. YOU must, in turn, come to YOUR OWN conclusions about what action, if any, YOU might choose to take'.